Regional Grocery Chain

The Challenge

A 200+ store grocery retailer across three countries was using uniform pricing everywhere.

• Underpricing in affluent urban areas
• Losing volume to discounters in price-sensitive regions
• Previous attempts based on gut feel failed

The Approach

Built a zone-based pricing model using 18 months of transaction data across ~4,000 SKUs.

• Store clustering: 5 pricing zones by competition, basket size, demographics
• Category elasticity: Separated “known value items” from margin categories
• Guardrails: Maximum price differentials to avoid backlash
• Phased rollout: 3 test zones, 200 SKUs first

The Outcome

Six months after full rollout:

Key Insight

Most retailers think “regional pricing” means charging more in rich areas.

The real opportunity is surgical: raise prices on items customers don’t compare, stay sharp on the items they do.